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THE MINISTRY OF FINANCE

THE MINISTRY OF FINANCE

CIRCULAR No. 96/2000/TT-BTC OF SEPTEMBER 28, 2000 GUIDING THE MANAGEMENT AND PAYMENT OF INVESTMENT CAPITAL AND PUBLIC-SERVICE CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE BELONGING TO THE STATE BUDGET�S CAPITAL SOURCE

Pursuant to the State Budget Law promulgated on March 20, 1996 and the Government�s Decree No. 87/CP of December 19, 1996 detailing the division of responsibilities for managing, drafting, implementing and settling the State budget;

Pursuant to the Government�s Decree No. 52/1999/ND-CP of July 8, 1999 issuing the Investment and Construction Management Regulation and Decree No. 12/2000/ND-CP of May 5, 2000 amending and supplementing a number of articles of the Investment and Construction Management Regulation issued together with the Government�s Decree No. 52/1999/ND-CP of July 8, 1999;

The Finance Ministry hereby guides the management and payment of investment capital and public-service capital of investment and construction nature belonging to the State budget�s capital source as follows:

Part I

GENERAL PROVISIONS

1. The State budget capital (including domestic capital of all State budget levels, the Government�s foreign loans and foreign aid capital provided to the Government, local administrations and State bodies) shall be paid only for investment projects of subjects entitled to use the State budget capital in accordance with the State Budget Law and the Investment and Construction Management Regulation.

2. Investment projects using the State budget capital must complete all investment and construction procedures, be incorporated in the State�s annual investment plans and meet all conditions for capital payment according to the Investment and Construction Management Regulation and the provisions of this Circular.

3. The finance agencies of different levels shall manage investment capital and public-service capital of investment and construction nature belonging to the State budget�s capital source as well as investment projects using other capital sources of the State. The State treasuries shall have the responsibility to closely inspect and control all stages of the payment process, ensure full and timely capital payment according to the prescribed regime for projects qualified for capital payment; if detecting that investors have used capital for wrong purposes or at variance with the prescribed regime, thus causing waste and loss to the State�s capital, they must take measures to prevent and handle such cases in time.

4. This Circular applies to projects with investment from the State budget�s capital source and the source of public-service capital of investment and construction nature under the management of the ministries, agencies attached to the Government, political organizations, socio-political organizations, social organizations, socio-professional organizations, State corporations (herein after collectively referred to as ministries), the provinces and centrally-run cities (hereinafter collectively referred to as provinces) as well as urban districts, rural districts, towns and provincial cities (hereinafter collectively referred to as districts).

The management, control and payment of investment capital belonging to the commune budgets; the management, control and payment of State budget capital for planning projects and investment projects of overseas Vietnamese representative missions, security and defense projects of confidential requirements, and projects on copyright purchase shall be regulated by separate documents.

Part II

SPECIFIC PROVISIONS

I. INVESTMENT PROJECTS USING STATE BUDGET CAPITAL AND PUBLIC-SERVICE CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE

1. Socio-economic infrastructure projects where capital is irrecoverable in the following fields:

- Communications, irrigation, education and training, healthcare;

- Planting of headwater forests, protection forests, national gardens, nature conservation parks;

- Farms and stations for veterinary care, fauna and flora, research into new breeds and varieties and improvement of breeds and varieties;

- Construction of cultural, social, physical training and sport, public welfare works;

- State management, science and technology;

- Protection of the environment and ecology in different regions and territories.

2. Defense and security projects where capital is irrecoverable.

3. Support for enterprises� investment projects in those fields where the State�s involvement is required by law.

4. Projects allocated with public-service capital in the State budget estimate to repair, renovate, expand and upgrade existing material bases, which have a value of VND 100 million or more, for the purpose of recovering or increasing the value of fixed assets (including also the building of new construction items for existing bases of administrative and public-service agencies and units).

Public-service capital shall not be allocated to investment projects on new construction, except for cases decided by the Prime Minister.

5. Other investment projects decided by the Government.

II. MAKING AND NOTIFICATION OF PLANS ON INVESTMENT CAPITAL, PUBLIC-SERVICE CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE

1. Annual plans:

1.1. During the time when the annual State budget estimates are drafted, basing themselves on the project implementation tempo and the examination figures already notified, investors shall make plans on investment capital of their projects and submit them to the superior managing bodies for incorporation into the State budget estimates according to the State Budget Law.

Basing themselves on the agencies� and units� needs to repair, renovate, expand and upgrade their existing material bases, investors shall make plans on investment expenditure with the public-service capital source, incorporate them in the State budget estimates to be sent to the superior bodies according to the State Budget Law.

1.2. The ministries and the provincial People�s Committees shall synthesize and make investment capital plans and send them to the Finance Ministry and the Ministry of Planning and Investment.

1.3. On the basis of the socio-economic development plans and the economy�s major balances, the Finance Ministry shall coordinate with the Ministry of Planning and Investment in allocating the investment capital plan to each ministry, provincial People�s Committee and to important projects of the State.

The provincial/municipal Finance and Pricing Services shall join the provincial/municipal Planning and Investment Services in advising the provincial People�s Committees on the development investment policies for each period and each plan year and on the apportion of investment capital to each project under the provincial management.

The district Finance Sections shall join the district�s functional bodies in advising the district People�s Committees on the development investment policies for each period and each plan year, on the apportion of investment capital to each project under the district management.

1.4. After being assigned the budgets by the Government, the ministries and the provincial People�s Committees shall allocate investment capital to each project under their respective management, ensuring compatibility with the assigned quotas on total investment amount; structure of domestic capital and foreign capital; structure of economic branches; capital amounts of the State�s important projects as well as compliance with the Government�s direction on the management of annual socio-economic development plans and State budget estimates.

1.5. After allocating investment capital to each project, the ministries and provincial People�s Committees shall send the investment capital plans to the Ministry of Finance for examination of the following aspects:

- Assurance of conditions by the projects incorporated in the investment capital plan prescribed at Point 1, Clause III, Part II of this Circular.

- Compatibility with the Government-assigned quotas on total investment level, structure of domestic capital and foreign capital, structure of economic branches, capital levels of the State�s important projects.

- Adherence to the principles on plan allocation; investment projects must have investment decisions issued by October of the year preceding the plan year; Groups B and C projects must be allocated with sufficient capital for implementation according to the Government�s stipulations.

After examination, if the deployed plans fail to meet the above-mentioned requirements, the Finance Ministry shall make written requests for the readjustment thereof. Where the ministries or provincial People�s Committees fail to make readjustments or have made readjustments but their plans still fail to comply with regulations, the Finance Ministry shall send written reports thereon to the Prime Minister for decision while the finance agencies shall refrain from transferring capital to the State treasuries for payment.

The provincial/municipal Finance-Pricing Services (or the district Finance Sections) shall review the list of projects incorporated in the local capital construction investment plans according to the above provisions. Particularly for projects invested with capital sources left at the localities under the National Assembly�s resolutions and the Government�s decisions, they must also comply with the provisions on investment objects and the use of each investment capital source. Where the deployed plans fail to comply with regulations, the provincial/municipal Finance and Pricing Services (or the district Finance Sections) shall have to send reports thereon to the provincial (or district) People�s Committees for consideration and readjustment while refraining from transferring money to the State treasuries for payment.

1.6. On the basis of the allocated or readjusted plans which have complied with regulations:

- The ministries and the provincial or district People�s Committees shall assign the plan quotas to investors for implementation, and concurrently send them to the State treasuries of the same level for monitoring and use as basis for capital control and payment.

- For projects managed by the ministries, the Finance Ministry shall notify the investment capital payment plans to the State treasuries for use as basis for payment of capital therefor.

- For projects managed by the provinces, the provincial/municipal Finance and Pricing Services shall notify the investment capital payment plans to the provincial State treasuries for use as basis for payment of capital therefor.

- For projects managed by the districts, the district Finance Sections shall notify the investment capital payment plans to the district State treasuries for use as basis for payment of capital therefor.

2. Quarterly plans:

The contents of the quarterly plans on investment capital, public-service capital of investment and construction nature must reflect the value of the volume already performed in the preceding quarter and in the whole period from the beginning of the year till the end of the preceding quarter; the capital amounts already advanced and recovered and paid in the preceding quarter and in the whole period from the beginning of the year till the end of the preceding quarter; anticipate the value of the volume to be performed in the quarter; demands for capital advance and payment in the quarter.

2.1. Basing themselves on the assigned investment capital plans and the project implementation tempo, investors shall make quarterly investment capital plans with the above contents and send them to the State treasuries where investors have direct transactions with and concurrently to the ministries or provincial People�s Committees on the 10th of the last month of the preceding quarter (particularly for the first quarter, investors shall send such plans within 5 days after receiving the annual investment capital plans assigned by the ministries or the provincial People�s Committees).

2.2. Basing themselves on the annual investment capital plans and the budget capability, the finance agencies shall have to arrange quarterly spending levels and notify the State treasuries thereof; basing themselves on the payment capital demands they shall transfer capital in time to the State treasuries for payment for projects.

2.3. For projects managed by the districts, investors shall make quarterly capital allocation plans and send them to the district Finance Sections. Basing themselves on the whole year�s capital plan and the budget capability, the district Finance Sections shall allocate the quarterly spending amount to each project, notify investors as well as the district State treasuries thereof; basing themselves on the payment capital demands, they shall transfer capital in time to the State treasuries for payment for projects.

2.4. For public-service capital of investment and construction nature, basing themselves on the annual State budget estimates notified to them, investors shall make quarterly spending plans and send them to the State treasuries they have direct transactions with for use as basis for control and payment.

III. CONDITIONS FOR HAVING INVESTMENT CAPITAL, PUBLIC-SERVICE CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE PAID

Investment projects shall receive State budget capital payment when they meet all the following conditions:

1. Having completed all investment and construction procedures, specifically in the following stages:

1.1. Investment preparations:

- The competent authority�s document permitting the making of investment preparations.

- The cost estimate for the investment preparation work, which has been approved by the competent authority.

1.2. Project execution preparation

- The feasibility study report (or investment report) and the competent authority�s investment decision.

- The cost estimate for the project execution preparation work, which has been approved by the competent authority.

1.3. Investment execution:

- The feasibility study report (or investment report) and the competent authority�s investment decision.

- The technical design and total cost estimate, the decision approving the technical design and total cost estimate. For Groups A and B projects, if their technical design and total cost estimate have not yet been approved, their investment decisions must prescribe the capital level of each construction item and there must be the designs and cost estimates of different construction items to be constructed in the year, which have been approved by the competent authorities.

2. Having been incorporated in the investment capital plans as prescribed at Point 1, Clause II, Part II of this Circular.

3. Decisions on the assignment of tasks to the investor, on the establishment of the project management board (for cases where project management boards must be established), on the appointment of the board�s chairman, chief accountant or a person in charge of accounting.

4. Having organized bidding or designated bidders for the selection of consultants, procurement of equipment and construction and installation according to the Bidding Regulation.

5. Having satisfied all conditions for payment of advance capital and payment for the completed volumes according to the provisions in Clauses IV and V, Part II of this Circular.

6. For the source of public-service capital of investment and construction nature:

- There must be the feasibility study report (or investment report) and the investment decision.

- There must be the document approving the bidding result (for bidding package for which bidding is organized) or the decision approving the design and cost estimate (for bidding packages with designated bidders).

- There must be the contract for work assignment or the economic contract signed between the investor and the contractor.

- Being arranged in the annual State budget estimate.

7. Investors shall open accounts at the State treasury in the place convenient for payment control and for their transactions.

IV. ADVANCE CAPITAL AND RECOVERY OF ADVANCE CAPITAL

1. Objects eligible for advance capital

- Investment projects for which bidding is organized under turn-key contracts.

- Construction and installation biding packages for which bidding is organized.

- Procurement of equipment (including imported and locally-procured equipment).

- Consultancy contracts.

- The ground clearance and compensation work.

- Several jobs covered with other expenses of the project, such as expenses for the project management apparatus, land rentals or land use right transfer tax.

Investment projects or the work volumes belonging to investment projects other than the above-mentioned objects shall receive advance capital only when it is so permitted by the Prime Minister.

2. Conditions for receiving advance capital:

2.1. For investment projects for which bidding is organized under turn-key contracts (bidding for the entire work of designing, equipment supply, construction and installation to be performed by one contractor) and the construction and installation bidding packages for which bidding is organized.

- There must be the competent authority�s written approval of the bidding results.

- There must be the economic contract signed between the investor and contractor.

- There must be a contract performance security paper made by the contractor.

2.2. For the procurement of equipment (including imported and home-made equipment):

- There must be the competent authority�s written approval of the bidding result (for equipment for which bidding is organized) or the document designating bidders (for equipment for which no bidding is organized).

- There must be the economic contract signed between the investor and the contractor for the supply, processing or manufacture of equipment. Particularly for imported equipment, there must be the competent authority�s written approval of the contract therefor according to current regulations.

- There must be a contract performance security paper made by the contractor (for equipment for which bidding is organized).

2.3. For jobs in need of hired consultants:

- There must be the competent authority�s written approval of the bidding result (for jobs for which bidding is organized) or the document designating bidders (for jobs for which no bidding is organized).

- There must be the economic contract signed between the investor and consultancy contractor.

2.4. For some jobs covered by other expenses of the project:

- For the ground clearance and compensation work, there must be approved compensation plan and cost estimate.

- For expense for land allocation, land tax or land use right transfer tax, there must be the specialized bodies� notices requesting the investor to make payment thereof.

- For expense for the operation of the project management apparatus, there must be the approved cost estimate.

3. The level of advance capital

3.1. For investment projects for which bidding is organized under turn-key contracts:

- Advance for the procurement of equipment shall be made on the basis of the payment tempo (pursuant to Item 3.3 below).

- The remaining advance amount equal to 15% of the bidding package�s value shall be paid, which, however, must not exceed the whole year�s capital plan already apportioned to these jobs.

3.2. For construction and installation:

- For bidding packages valued at under VND 10 billion, the advance level shall be equal to 20% of the contract value but must not exceed the whole year�s capital plan of the bidding package.

- For bidding packages valued at between VND 10 billion and under 50 billion, the advance level shall be equal to 15% of the contract value but must not exceed the whole year�s capital plan of the bidding package.

- For bidding packages valued at VND 50 billion or more, the advance level shall be equal to 10% of the contract value but must not exceed the whole year�s capital plan of the bidding package.

In cases where the whole year�s capital plan of a bidding package is lower than the advance level prescribed above (such bidding package has not yet received full advance amount at the prescribed level), the concerned State treasury shall continue to pay the advance capital in the subsequent year�s plan until the prescribed advance level is reached.

3.3. For the procurement of equipment:

- The advance amount shall be the sum of money the investor shall have to pay as contracted, but must not exceed the year�s capital plan. Where the allocated capital plan is not enough for payment as contracted, the investor shall have to seek for supplementary capital sources.

- The advance capital shall be paid according to the tempo of payment made by the investors to the contractors for the supply, processing or manufacture of equipment set in the economic contracts, which shall be effected till the equipment have been put into the investors� storehouses (for equipment requiring no installation) or have been installed and pre-acceptance tested (for equipment requiring installation).

3.4. For consultancy contracts, the minimum advance amount shall be equal to 25% of the bidding package�s value but must not exceed the whole year�s capital plan already allocated to the jobs requiring hired consultants.

3.5. For the ground clearance and compensation work, the advance amount shall comply with the necessary requirements of the compensation work but must not exceed the whole year�s capital plan already arranged for the ground clearance and compensation work.

3.6. For some jobs covered with other expenses of the project, which are eligible for advance payment, the advance amount shall comply with the necessary requirements but must not exceed the whole year�s capital plan already allocated to such jobs.

4. Recovery of advance capital:

4.1. Capital advanced for construction and installation contracts shall be gradually recovered at each period of payment for the completed construction and installation volumes according to the following provisions:

- Time for starting the recovery:

+ For bidding packages valued at under VND 10 billion: when 30% of the contract�s value is paid.

+ For bidding packages valued at between VND 10 billion and under 50 billion: when 25% of the contract�s value is paid.

+ For bidding packages valued at VND 50 billion or more: when 20% of the contract�s value is paid.

- The advance amount shall be fully recovered when the bidding package receives payment equal to 80% of the value of the completed construction and installation volume.

- The advance amount to be recovered in each period shall be determined as follows:

+ When 50% of the contract�s value is paid, the recovered advance capital amount shall reach 40% of the total advance amount.

+ When 70% of the contract�s value is paid, the recovered advance capital amount shall reach 80% of the total advance amount.

+ When 80% of the contract�s value is paid, the recovered advance capital amount shall reach 100% of the total advance amount.

Where the advance capital is not fully recovered because the bidding package has not yet been paid at the rate prescribed above but the project is no longer incorporated in the plan or the construction thereof is suspended, the investor shall have to report to the State treasury on the situation of the use of the advance capital amount not yet recovered and concurrently to the competent authorities for handling.

Where the advance capital has been paid but the bidding package fails to be constructed according to the time limit prescribed in the contract, the investor shall have to explain such to the State treasury and have to repay the capital amount already advanced

4.2. Capital advanced for the procurement of equipment shall be recovered at each time of payment for the completed equipment volume.

For equipment requiring no installation, after they have been pre-acceptance tested and put into the investor�s storehouse, the investor shall have to immediately send vouchers thereof to the State treasury for completion of payment procedures for the completed equipment volume and for recovery of the capital amount already advanced.

For equipment requiring installation, when equipment has arrived at the investor�s storehouse, the investor shall have to report such to the State treasury for monitoring; when equipment has been installed, the investor shall have to send vouchers thereof to the State treasury for completion of payment procedures for the completed equipment volume and for recovery of the advanced capital amount. The State treasury shall recover the full advance amount advanced for equipment procurement when making payment for the completed construction and installation volume.

Where the advance capital has been paid but the investor, after the time limit prescribed in the contract has expired, still receives no equipment, the investor shall have to explain such to the State treasury and repay the capital amount already advanced.

4.3. Capital advanced for consultancy contracts shall be recovered at each time of payment for the completed consultancy volume on the following principles:

- The time of recovery shall be the time when the payment for the completed volume starts.

- The recovered capital amount shall be the capital amount to be paid multiplied by (x) the advance capital rate.

4.4. Capital advanced for the ground clearance and compensation work and jobs covered with other expenses of the project shall be recovered in lump sum at the time of payment for the completed volume of such jobs.

4.5. The level of recovering capital advanced for contracts of different kinds may be higher than the above-prescribed level if it is so unanimously requested by the investor and the contractors.

4.6. Where the plan schedule has expired but the advanced capital has not yet fully recovered because the bidding package has not yet received payment at the prescribed rate, the recovery shall continue in the subsequent year�s plan and such advanced capital shall not be subtracted from the subsequent year�s capital plan.

5. For some supplies being big-value structures and semi-finished products used in construction, which need to be manufactured in advance in order to ensure the project construction tempo and some special-typed supplies and supplies which need to be seasonally reserved, if investors find it necessary to have more advance capital than the advance levels prescribed above, they shall report such to the Finance Ministry (for projects managed by the ministries), the provincial/municipal Finance and Pricing Services (for projects managed by the provinces) or the district Finance Sections (for projects managed by the districts) for decision. Such advance capital shall be recovered at the time of payment for the completed capital construction volume composed of the supplies eligible for advance payment as mentioned above.

6. For public-service capital of investment and construction nature:

- For projects capitalized at VND 1 billion or more, the advance payment and the recovery of the advance capital shall be effected like for capital construction investment capital.

- For projects capitalized at under VND 1 billion, they shall receive an advance payment equal to 50% of their annual plans. Such advance capital shall be gradually recovered at each period of payment for the completed volume and recovered in full within the plan year. The advance capital amount to be recovered at each period shall be the paid capital amount multiplied by (x) the advance payment rate.

7. For investment projects funded with foreign capital or bidding packages for which international bidding is organized under credit agreements signed between the Vietnamese Government and the financial donors which contain provisions on capital advance (objects eligible for capital advance, conditions for and levels of advance, recovery of advance capital), which are different from the above-mentioned provisions, such provisions of the signed agreements shall apply.

V. PAYMENT FOR COMPLETED VOLUMES

1. Payment for completed construction and installation volumes:

1.1. The construction and installation volume completed in the form of bidder designation and qualified for payment shall be the performed volume already pre-acceptance tested every month as contracted, which is incorporated in the assigned investment plans and has its design and detailed cost estimate already approved according to the State�s norms and unit prices.

1.2. The construction and installation volume completed in the form of bidding and qualified for payment shall be the performed volume already pre-acceptance tested as contracted, which is included in the assigned investment plans.

1.3. To receive payment for the completed construction and installation volume, investors shall send to the State treasuries the following documents:

1.3.1. For cases of bidder designation

- The written approval of the designs and detailed cost estimates of construction items.

- The decision on bidder designation.

- The economic contract between the investor and the contractor.

- The record on the pre-acceptance test of the completed construction and installation volume, enclosed with the calculation of the value of the pre-acceptance tested volume.

- The price bill and payment vouchers.

1.3.2. For cases of bidding:

- The written approval of the bidding results.

- The economic contract between the investor and the contractor.

- The record on the pre-acceptance test of the completed construction and installation volume, enclosed with the calculation of the value of the pre-acceptance tested volume.

- The price bill and payment vouchers.

For volumes arising outside the bidding packages, there must be written approvals of the supplementary bidding results (if the arising volume is opened to bidding) or the approved supplementary cost estimate (if the arising volume is subject to bidder designation).

1.4. Basing themselves on the investors� proposals and payment dossiers, within 7 working days after the receipt of valid dossiers, the State treasuries shall examine such dossiers, make payment to the investors and contractors and recover the advanced capital according to regulations.

2. Payment for completed equipment volumes:

2.1. The completed equipment volume qualified for payment shall be the equipment volume already put into the investor�s storehouse (for equipment requiring no installation) or already installed and pre-acceptance tested (for equipment requiring installation), which fully meets the following conditions:

- The list of equipment must be compatible with the investment decision and included in the assigned investment plan.

- Having been included in the economic contract between the investor and the contractor.

- Having been put into the investor�s storehouse (for equipment requiring no installation) or already installed and pre-acceptance tested (for equipment requiring installation).

2.2. To receive payment for completed equipment volumes, investors shall send to the State treasuries the following documents:

- The economic contract between the investor and the contractor.

- The bill-cum-delivery card (for domestically-procured equipment) or the import voucher set (for imported equipment).

- The warehousing card (for equipment requiring no installation) or the payment price bill for equipment installation volume (for equipment requiring installation).

- Transport, insurance, tax, warehousing charge vouchers.

- The price bill and payment vouchers.

2.3. Basing themselves on the investors� proposals and payment dossiers, within 7 working days after the receipt of complete and valid dossiers, the State treasuries shall examine such dossiers, make payment to the investors and contractors and recover the advanced capital according to regulations.

3. Payment for completed consultancy volumes:

3.1. The completed consultancy volume qualified for payment shall be the performed volume already pre-acceptance tested in conformity with the economic contract and included in the assigned investment plan.

3.2. To receive payment, investors shall send to the State treasuries the following documents:

- The decision on bid winning or bidder designation.

- The economic contract between the investor and the contractor.

- The record on the pre-acceptance test of the completed consultancy volume.

- Payment vouchers.

3.3. Basing themselves on the investors� proposals and payment dossiers, within 7 working days after the receipt of complete and valid dossiers, the State treasuries shall examine such dossiers, make payment to the contractors and recover the advanced capital according to regulations.

4. Payment for volumes covered with other expenses:

4.1. Apart from the jobs for which consultants are hired, other jobs covered with other expenses of the project shall be qualified for payment when they gather all the following grounds to prove that they have been completed:

- For construction land allocation fee, land tax or land use right transfer tax, there must be valid invoices and vouchers issued by the collecting agencies.

- For compensation and ground clearance expenses, there must be the approved compensation plans and cost estimates and the written certification of the performed compensation volume.

- For expenses for destruction and dismantlement of architectural objects and construction ground clearance, there must be the approved cost estimates, contracts and pre-acceptance test records.

- For expenses for the project management apparatus, there must be the approved cost estimates, cash plans, list of expenses and vouchers thereof.

- For expenses for making and evaluating designs and cost estimates, there must be contracts and pre-acceptance test records.

- For expenses for commencement of construction, pre-acceptance test, trial operation and inauguration, there must be the approved cost estimates and list of expenses.

- For expenses for specialists, training of technicians and production managers, there must be economic contracts and approved cost estimates.

- For construction insurance premiums, there must be insurance policies.

- For expenses for the investment and project preparation as well as execution preparation work, there must be the approved cost estimates, economic contracts, records on the pre-acceptance test of the work volume or reports on the work results.

4.2. Basing themselves on the investors� proposals and payment dossiers, within 7 working days after the receipt of complete and valid dossiers, the State treasuries shall examine such dossiers, make payment to the contractors and recover the advanced capital according to regulations.

5. The capital paid for each construction item must not exceed the cost estimate or the bid-winning price; the total capital amount paid for a project must not exceed the approved total cost estimate and total investment amount.

The capital amount paid for a project in the year (including both advance amount and the amount paid for the completed volume) must not exceed the whole year�s capital plan already allocated to the project.

6. Documents sent by investors to the Sate treasuries shall include those sent only once for the whole projects and those sent together with each payment request. Documents sent only once shall be: feasibility study reports (or investment reports), investment decisions, decisions approving the technical designs and total cost estimates, documents on cost estimates, documents on the approval of bidding results and economic contracts signed between investors and contractors.

7. For investment projects funded with foreign capital or bidding packages for which international biddings are organized under credit agreements signed between the Vietnamese Government and the financial donors, which contain provisions on payment different from the above-said provisions, such provisions of the signed credit agreements shall apply.

8. Investors must arrange enough capital in the annual plans for purchase of construction work insurance. The State shall not make payment to investors to cover damage and risk losses which fall under the insurance scope if investors fail to purchase construction work insurance according to current regulations.

9. For public-service capital of investment and construction nature:

- For projects capitalized at VND 1 billion or more, the payment for the completed volumes shall comply with the current investment capital management regime.

- For projects capitalized at under VND 1 billion, when some volume has been completed and pre-acceptance tested, investors shall compile dossiers requesting payment therefor and send them to the State treasuries. Such a dossier shall consist of:

+ The record on the pre-acceptance test of the completed volume.

+ The detailed calculation of the value of the volume subject to payment.

+ The price bill or expense list (for other expenses with non-use of price bills) and payment vouchers.

Basing themselves on the funding limits allocated by the finance agencies, the State treasuries shall control and make payments to the beneficiaries and recover the already advanced amounts (if any).

10. For extremely important projects requiring a capital advance and payment regime different from the above provisions, after obtaining the opinions from the competent authorities, the Finance Ministry shall issue separate guiding documents.

VI. REPORTING, SETTLEMENT AND INSPECTION REGIMES

1. On the 20th of every month and the 10th of the first month of the subsequent quarter, investors shall have to make reports on the situation of the investment execution, capital receipt and use in the month or the preceding quarter and send them to the State treasuries and also to the investment-deciding authorities. Particularly for Group A projects, investors shall send such reports to the State treasuries, the ministries or the provincial People�s Committees, the Ministry of Planning and Investment, the Finance Ministry, the Ministry of Construction and the General Department of Statistics for sum-up and reporting to the Prime Minister.

At the end of the plan year, investors shall have to make reports on the plan implementation and their units� accounting work according to current regulations; when their investment projects are completed, investors shall have to make reports on the settlement of investment capital according to regulations on the investment capital settlement regime.

Where the settlement of a completed investment project has been approved but the settled capital amount is lower than the capital amount already paid to the project, the investor shall have to recover the surplus capital amount from the contractor and refund it to the State.

2. Quarterly and at the end of the plan year, the ministries and the provincial People�s Committees shall have to synthesize the implementation of investment plans and the capital payment for projects under their respective management and send reports thereon to the Finance Ministry, the Ministry of Planning and Investment, the Ministry of Construction and the General Department of Statistics according to regulations.

3. The central and local State treasuries and finance agencies shall apply the regime of reporting on the capital payment and the settlement for completed projects and other necessary information according to the Finance Ministry�s regulations on the information and reporting regime in the field of capital construction investment.

At the end of the plan year, the State treasuries shall settle with the finance agencies the budget capital they have received and paid for projects according to regulations on the State budget settlement.

4. The ministries, the provincial People�s Committees, the finance agencies and the State treasuries shall conduct regular and irregular inspections of investors regarding their use of advance capital, capital paid for completed volumes and observance of the State�s development investment finance policies and regime.

VII. RESPONSIBILITIES AND POWERS OF CONCERNED AGENCIES

1. Investors:

- To perform the functions and tasks assigned to them according to the Investment and Construction Management Regulation. To receive and use capital for the right purposes and right subjects in an economical and efficient manner. To abide by law provisions on the financial management regime in investment and construction.

- To be accountable for the truthfulness and lawfulness of the project�s volume when payment is made (such volume must be compatible with the construction drawing design or technical construction design and its quality must comply with the design requirements); to ensure the accuracy, lawfulness and validity of data and documents supplied to the State treasuries and the functional State bodies.

- When the capital construction volumes have satisfied all the contractual conditions, to conduct timely pre-acceptance test thereof, compile complete payment dossiers and payment requests for the contractors.

- To report in time and fully as prescribed to the investment-deciding bodies and concerned State bodies; supply fully dossiers, documents and facts according to regulations of the State treasuries and finance agencies in service of the capital management and payment work; to submit to the inspection by the State treasuries, the finance agencies and the investment-deciding bodies of the use of investment capital and observance of the State�s development investment finance policies and regimes.

- To practice accounting for the receipt and use of investment capital according to current regulations on the accounting work of investors� units; to settle the completed investment capital according to regulations.

- To request capital payment when they meet all the conditions and request the State treasuries to reply and explain matters they deem unsatisfactory in the capital payment.

2. The ministries and the provincial and district People�s Committees:

- To guide, inspect and urge investors under their respective management to carry out investment plans, receive and use investment capital for the right purposes in accordance with the State�s regimes.

- To report on the implementation of investment plans according to regulations.

- Within the scope of their delegated competence, to be responsible to the Government and the State�s laws for their decisions.

3. The State treasuries:

- The central State treasury shall prescribe the order, procedures, dossiers and vouchers which need to be sent only once or each time of payment request in the capital advance and payment process.

- To guide investors in opening accounts for advance capital and capital payment.

- To pay capital in time and fully for projects when all conditions are met.

- To clearly explain in writing to investors the reduced or rejected payment amounts, to answer investors� inquiries about the capital payment.

- When detecting that decisions of competent authorities are contrary to current regulations, to make written requests for re-consideration and put forward proposals. If past the prescribed time limit, no reply is made, to be entitled to settle the cases according to their proposals; if a reply is made but deemed unsatisfactory, to settle the cases according to the competent authorities� opinions and at the same time to report such to the higher-level competent authorities for consideration.

- To apply the regimes of information and reporting and settle the investment capital and public-service capital of investment and construction nature belonging to the State budget�s capital source according to the provisions of the State Budget Law and the guidance of the Finance Ministry.

- To be entitled to request investors to supply dossiers, documents and information according to the prescribed regime in service of the capital payment control work.

- To be permitted to suspend capital payment or recover capital amounts used by investors for wrong purposes or wrong objects or in contravention of the financial management regime of the State and, at the same time to report such to the Finance Ministry for handling; to be entitled to refuse capital payment for projects whose investors fail to strictly abide by the regime of formulating quarterly investment capital plans, the reporting regime prescribed in the Investment and Construction Management Regulation and in this Circular.

- Not to participate in the Councils for pre-acceptance test of completed capital construction volumes.

- To organize the capital control and payment according to uniform professional processes, to ensure the strict capital management and make timely, full and convenient payments to investors.

- To be responsible to the Finance Minister and the State�s laws for the receipt and use of State budget capital and the payment in investment and construction.

4. The finance agencies of different levels:

- To ensure sufficient capital sources and transfer capital in time to the State treasuries so that the latter make payment for projects.

- To report on and settle development investment capital in accordance with the State Budget Law.

- To coordinate with the ministries and the provinces in guiding and inspecting investors� observance of the development investment finance regimes and policies, management and use of investment capital.

- To be entitled to request investors to supply documents and information necessary for the State management of development investment finance, including documents in service of evaluation of investment projects and allocation of annual plans, periodical reports according to the information and reporting regime and documents in service of examination of investment capital settlements.

Part III

IMPLEMENTATION PROVISIONS

1. This Circular takes effect 15 days after its signing and replaces the Finance Ministry�s Circular No. 135/1999/TT-BTC of November 19, 1999 guiding the management and settlement of investment capital and public-service capital of investment and construction nature belonging to the State budget�s capital source and Circular No. 76/TC-DTPT of November 1, 1997 guiding the management and allocation of capital construction investment capital belonging to the district and commune budgets.

2. For other development investment expenditures from the State budget (State reserve expenditures, expenditures in support of enterprises� working capital, expenditures for contribution of joint venture shares, expenditures for loans to foreign countries and for foreign aid, expenditures for development assistance funds), they shall comply with separate guiding documents on each kind of expenditures mentioned above.

3. For investment projects funded with other capital sources of the State, the payment principles prescribed in this Circular shall also apply.

For the Finance Minister

Vice Minister

VU VAN NINH